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Google remains committed to investing $75 billion in AI despite macroeconomic uncertainties
GOOGAlphabet(GOOG) Business Insider·2025-04-25 02:42

Investment Plans - Alphabet plans to invest 75billionthroughouttheyear,focusingonexpandingdatacentercapacityforAIinfrastructuredespitemacroeconomicuncertainties[1]−Thecompanyreportedfirst−quarterearningsthatexceededexpectations,resultinginasharepriceincreaseofover475 billion throughout the year, focusing on expanding data center capacity for AI infrastructure despite macroeconomic uncertainties [1] - The company reported first-quarter earnings that exceeded expectations, resulting in a share price increase of over 4% in after-hours trading [2] Macroeconomic Challenges - Google acknowledges the impact of macroeconomic factors, including tariffs, on its business, particularly noting a potential headwind for its advertising revenue due to changes in the de minimis exemption [3][4] - Analysts predict that companies like Shein and Temu will reduce their advertising spending on Google due to increased costs from tariffs, which could significantly affect Google's revenue [5] Financial Performance and Expenses - Alphabet's total operating expenses rose by 9% to 23.3 billion compared to the first quarter of 2024, with research and development investments increasing by 14% driven by higher compensation and depreciation expenses [9] - Administrative expenses surged by 17%, attributed to legal and other charges, indicating rising operational costs [10] Legal Pressures - Alphabet faces mounting legal challenges, including an antitrust lawsuit filed by the Justice Department and several states, which could lead to significant operational changes, including potential divestitures [10][11]